Gall v Domino's Pizza Enterprises Limited (No 2)
[2021] FCA 345
•13 April 2021
FEDERAL COURT OF AUSTRALIA
Gall v Domino’s Pizza Enterprises Limited (No 2) [2021] FCA 345
File number: VID 685 of 2019 Judgment of: MURPHY J Date of judgment: 13 April 2021 Catchwords: PRACTICE AND PROCEDURE – Representative Proceedings - application to strike out Further Amended Statement of Claim (FASOC) – approach to pleadings having regard to modern case management – whether parts of FASOC should be struck out as they do not disclose a reasonable cause of action – whether Fair Work Act 2009 (Cth) (Fair Work Act) constitutes a code in relation to claims concerning underpayment of award entitlements which precludes such claims under the Australian Consumer Law (ACL) in Sch. 2 of the Competition and Consumer Act 2010 (Cth) – whether by necessary implication ss 52 and 82 of Trade Practices Act 1974 (Cth) impliedly limited or repealed to the extent of any inconsistency by later enactment of Fair Work Act –whether ss 18 and 236 of the ACL should be construed as limited in relation to claims concerning underpayment of award entitlements by the operation of ss 45, 539 and 545 of the Fair Work Act– whether the pleading is sufficient to show that the applicant and group members have suffered loss and damage when their rights to bring an action under the Fair Work Act are intact – whether the pleading of causation and reliance is sufficient – whether the applicant is required to plead a counterfactual – whether the applicant is required to plead whether “but for” or “a material cause” test for causation is relied upon – whether the applicant is required to plead that the reliance of third parties on the alleged representations was reasonable – whether the pleading of the representations is adequate – whether miscellaneous parts of FASOC should be struck out as conclusory, rolled up, embarrassing, confusing, vague or ambiguous – strikeout application dismissed Legislation: Australian Securities and Investments Commission Act 2001 (Cth)
Competition and Consumer Act 2010 (Cth)
Conciliation and Arbitration Act 1904 (Cth)
Corporations Act 2001 (Cth)
Fair Work Act 2009 (Cth)
Federal Court of Australia Act 1976 (Cth)
Federal Court Rules 2011 (Cth)
Human Rights and Equal Opportunity Act 1986 (Cth)
Industrial Relations Act 1988 (Cth)
Trade Practices Act 1974 (Cth)
Workplace Relations Act 1996 (Cth)
Civil Procedure Act 2005 (NSW)
Industrial Arbitration Act 1912 (NSW)
Supreme Court (General Civil Procedure) Rules 2015 (Vic)
Explanatory Memorandum for the Fair Work Bill 2008
Cases cited: Allstate Life Insurance Co v Australia & New Zealand Banking Group Ltd (unreported, Beaumont J, 13 September 1994)
Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; 250 CLR 640
Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2020] FCAFC 130
Banque Commerciale S.A., En Liquidation v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279
Barclay Mowlem Construction Ltd v Dampier Port Authority and Another [2006] WASC 281; (2006) 33 WAR 82
Berry v CCL Secure Pty Ltd [2020] HCA 27; (2020) 94 ALJR 715
Bond Corp Pty Ltd v Thiess (1987) 14 FCR 215; (1987) 71 ALR 615
Brosnan v Katke [2016] FCAFC 1
Builders Licensing Board v Inglis (1985) 1 NSWLR 592
Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; 218 CLR 592
Butler v Attorney-General (Victoria) [1961] HCA 32; (1961) 106 CLR 268
Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410
Campbell v BackOffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304
Construction, Forestry, Mining and Energy Union v Gordonstone Coal Management Pty Ltd [1997] FCA 1014; (1997) 78 FCR 437
Dafallah v Fair Work Commission [2014] FCA 328; (2014) 225 FCR 559
Doe d Rochester (Bishop) v Bridges (1831) 1 B&Ad 847; 109 ER 1001
Downer Connect Pty Ltd v McConnell Dowell Construction (Aust) Pty Ltd [2008] VSC 77
Energex Limited v Alstom Australia Limited [2005] FCAFC 215; (2005) 225 ALR 504
Ethicon Sarl v Gill [2021] FCAFC 29
Ezekiel v Law Society of the Australian Capital Territory [2013] FCA 725
Forty Two International Pty Ltd v Barnes [2010] FCA 397
Goodwin v Phillips [1908] HCA 55; (1908) 7 CLR 1
Google Inc v Australian Competition and Consumer Commission [2013] HCA 1; 259 CLR 435
I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41; (2002) 210 CLR 109
Janssen-Cilag Pty Ltd v Pfizer Pty Ltd [1992] FCA 649; (1992) 37 FCR 526
Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [2000] FCA 1572; (2000) 104 FCR 564
Josephson v Walker [1914] HCA 68; (1914) 18 CLR 691
Kernel Holdings Pty Ltd v Rothmans of Pall Mall (Australia) Pty Ltd (3 September 1991, French J, unreported)
Mallinson v Scottish Australian Investment Co Ltd [1920] HCA 51; (1920) 28 CLR 66
March v E & MH Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506
Marks v GIO Australia Holdings [1998] HCA 69; (1998) 196 CLR 494
McGuirk v University of New South Wales [2009] NSWSC 1424
McKellar v Container Terminal Management Services Limited [1999] FCA 1101; (1999) 165 ALR 409
Mobil Oil Australia Pty Ltd v Victoria (2002) 211 CLR 1; [2002] HCA 27
Multigroup Distribution Services Pty Ltd v TNT Australian Pty Ltd [1996] FCA 781; (1996) ATPR 41-522
National Mutual Property Services (Australia) Pty Ltd v Citibank Savings Ltd (1995) 132 ALR 514
Oztech Pty Ltd v Public Trustee of Queensland [2019] FCAFC 102; (2019) 269 FCR 349
P Dawson Nominees Pty Ltd v Brookfield Multiplex Ltd (No 2) [2010] FCA 176
Parkdale Custom Built Furniture v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191
Pasmore v Oswaldtwistle Urban District Council (1898) AC 387
Plaintiff S157/2002 v Commonwealth of Australia [2003] HCA 2; (2003) 211 CLR 476
Polar Aviation Pty Ltd v Civil Aviation Safety Authority (No 4) [2011] FCA 1126; (2011) 203 FCR 293
Pt Bayan Resources TBK v BCBC Singapore Pte Ltd [2015] HCA 36; (2015) 258 CLR 1
Qantas Airways Limited v Gama [2008] FCAFC 69; (2008) 167 FCR 537; 247 ALR 273
Re Punters Show Pty Ltd [2017] NSWSC 605
Sadie Ville Pty Ltd v Deloitte Touche Tohmatsu (A Firm) [2017] FCA 1202
Sarawati v The Queen [1991] HCA 21; (1991) 172 CLR 1
Sellars v Adelaide Petroleum [1994] HCA 4; (1994) 179 CLR 332; (1994) 120 ALR 16
Shergold v Tanner [2002] HCA 19; (2002) 209 CLR 126
SMEC Australia Pty Ltd v McConnell Dowell Constructions (Aust) Pty Ltd (No. 2) [2011] VSC 492
State of Queensland v Pioneer Concrete (Qld) Pty Ltd [1999] FCA 499; [1999] ATPR 41-691
Taco Co of Australia Inc v Taco Bell Pty Ltd [1982] FCA 170; (1982) 42 ALR 177
Taylor v Lederman [2013] VSC 99
Thomas v Powercor Australia Ltd (No 1) [2010] VSC 489
Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15
Truth About Motorways Pty Ltd v Macquarie Infrastructure Investments Management Ltd [1998] FCA 525; (1998) ATPR 41-633; (1998) 42 IPR 1
Uber Australia Pty Ltd v Andrianakis [2020] VSCA 186
United States v Jennings [1983] 1 AC 624
Wardley Australia Ltd v State of Western Australia [1992] HCA 55; (1992) 175 CLR 514
Wheelahan v City of Casey (No.12) [2013] VSC 316
Williams v Pisano [2015] NSWCA 177; (2015) 90 NSWLR 342
Wride v Schulze [2004] FCAFC 216
Wyzenbeek v Australasian Marine Imports Pty Ltd [2019] FCAFC 167; (2019) 272 FCR 373
Y Primavera v T Bakos [2019] NSWSC 825
Division: General Division Registry: Victoria National Practice Area: Employment and Industrial Relations Number of paragraphs: 208 Date of hearing: 9 June 2020 Counsel for the Applicant: Ms R Doyle SC, Mr D Fahey and Ms S Kelly Solicitor for the Applicant: Phi Finney McDonald Lawyers Counsel for the Respondent: Mr G Harris QC and Mr N Harrington Solicitor for the Respondent: DLA Piper Australia ORDERS
VID 685 of 2019 BETWEEN: RILEY GALL
Applicant
AND: DOMINO'S PIZZA ENTERPRISES LIMITED (ACN 010 489 326)
Respondent
ORDER MADE BY:
MURPHY J
DATE OF ORDER:
13 APRIL 2021
THE COURT ORDERS THAT:
1.The Respondent’s amended interlocutory application to strike out the Further Amended Statement of Claim be dismissed.
2.The Respondent pay the costs of the application.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
MURPHY J:
By an amended interlocutory application the respondent, Domino’s Pizza Enterprises Ltd (Domino’s), sought an order that, pursuant to rr 16.21 and 16.45 of the Federal Court Rules 2011 (Cth) (Rules), the Applicant’s Amended Statement of Claim filed 26 September 2019 be struck out on grounds including that it is evasive or ambiguous, likely to cause prejudice, embarrassment or delay in the proceeding, contains rolled up allegations, fails to plead material facts and discloses no reasonable cause of action. In response to the interlocutory application the applicant, Mr Riley Gall, filed a Further Amended Statement of Claim (FASOC) which sought to rectify the asserted deficiencies. Domino’s did not accept that the asserted deficiencies were remedied by the FASOC and it pressed its strikeout application. The application was heard as an application to strike out the FASOC, it being the current pleading.
The parties’ submissions in the application were lengthy and sometimes pedantic, between them the parties relied on four lever arch binders of authorities, and the hearing took a full day. The hearing, conducted remotely because of the pandemic, was plagued by audio problems and the transcript is thus incomplete.
For the reasons I explain, it is appropriate to dismiss the application. While the FASOC is sometimes convoluted and repetitive I consider it meets the main purposes of a pleading by putting Domino’s on notice of the case it has to meet, avoiding surprise to Domino’s, defining the issues both in aid of discovery and for trial, and together with other case management orders it will allow the trial to be conducted efficiently and fairly to both parties. I have no doubt that Domino’s understands the case it has to meet, and in my opinion its complaints about the ambiguity, embarrassment and delay that it said will arise from the alleged deficiencies in the pleading were exaggerated. Any continuing concerns Domino’s has in this regard will be better dealt with through further case management orders, including for the exchange of evidence and written submissions in advance of trial, rather than through an application of technical pleadings rules to this novel, large and complex case. To the limited extent that I have directed further pleading and particularisation of the FASOC those matters are not sufficiently important to delay the further progress of the matter.
THE PROCEEDING
At all material times Domino’s and its franchisees, from time to time, conducted a business in Australia in the fast food industry, selling food, predominantly pizza, from stores trading as Domino’s Pizza. Domino’s owned and operated some of the stores directly (Corporate Stores) and also granted franchise agreements under which third parties were licensed to operate Domino’s Pizza stores in Australia in accordance with the terms of a franchise agreement (Franchise Operators).
The applicant was:
(a)employed as a delivery driver by a Franchise Operator, Dominoids Pty Ltd (Dominoids), at a Domino’s Pizza store in North Caboolture, Queensland (the North Caboolture store) in the period from October 2015 to July 2016; and
(b)later employed as a delivery driver by another Franchise Operator, MA CS Pizza Pty Ltd (MC Pizza), at the North Caboolture store in the period from August 2016 to March 2018.
On 24 June 2019, the applicant commenced this class action pursuant to Part IVA of the Federal Court of Australia Act 1976 (Cth) (FCA), brought by him on his own behalf and on behalf of all persons who, at any time during the period 24 June 2013 to 23 January 2018 (the relevant period):
(a)were employed to perform work in Australia as delivery drivers or in-store workers by a Franchise Operator of Domino’s:
(b)were covered by the Fast Food Industry Award 2010 (the Award) within the meaning of s 48 of the Fair Work Act 2009 (Cth) (the FW Act);
(c)to whom the Award applied, within the meaning of s 47 of the FW Act;
(d)were not paid the rates applicable under, or were not afforded the terms and conditions of employment in accordance with, the Award; and
(e)suffered loss and damage as a result.
The proceeding is novel. The applicant on his own behalf and on behalf of other employees of the Franchise Operators seeks damages from the franchisor, Domino’s, under s 236 of the Australian Consumer Law (ACL) in Schedule 2 to the Competition and Consumer Act 2010 (Cth) (the CCA) for alleged loss caused by misleading or deceptive conduct in contravention of s 18 of the ACL, based in representations and conduct by Domino’s directed to the Franchise Operators as to the pay rates and terms of conditions of employment applicable to the Franchise Operator’s employees. The loss or damage alleged by the applicant and the other employees is that they were underpaid the wages and terms of conditions to which they were entitled and that they also thereby suffered a loss of opportunity. No claim is made by the employees directly against their employers, the Franchise Operators.
The applicant summarised the main elements of the case as follows, which in my view captures the gist of the applicant’s case. As I have said, I consider Domino’s understands the case advanced against it.
First, the FASOC alleges that Domino’s represented (and by its conduct impliedly represented or conveyed) to Franchise Operators and persons who were considering becoming Franchise Operators (Prospective Franchise Operators) that:
(a)the terms and conditions of employment of all Domino’s employees were governed by two enterprise bargaining agreements (the Agreements); and
(b)that it was lawful to pay the employees rates of pay, and afford them conditions, contained in or based on the Agreements.
In the alternative, the FASOC alleges that Domino’s represented (and by its conduct impliedly represented or conveyed) to Franchise Operators and Prospective Franchise Operators that it held an opinion to this effect, and that its opinion was based on reasonable grounds.
In support of the contention that Domino’s made the alleged representations to Franchise Operators and Prospective Franchise Operators, the applicant relies upon a number of documents discovered by Domino’s, including:
(a)a document headed “Fair Work Laws - Australia” dated 30 April 2012 which is said to have been provided by Domino’s to Franchise Operators and Prospective Franchise Operators, which states amongst other things:
(i)the “terms and conditions of Domino’s Employees are governed by two Enterprise Bargaining Agreements (EBA). The 2001 agreement provides the conditions for Drivers and the 2009 agreement for In Stores and Managers”; and
(ii)“the wage rates for in-stores are provided by the 2009 EBA which was negotiated with the Union under the Fair Work Act. The rates were agreed and certified by Fair Work Australia.”
(b)the Dominoids Sub-Franchise Agreement which states that Dominoids is required to comply with the terms and conditions of any enterprise bargaining agreement or other workplace agreement to which Domino’s was a party in respect of its Corporate Store employees;
(c)a document entitled “Industrial Relations Facts – Australia” dated 8 September 2016 which states, amongst other things, that:
(i)Domino’s has an “IR team to help set up systems correctly and maintain compliance”; and
(ii)the Domino’s Bookkeeping Service (DBS) provided “Payroll and bookkeeping completed on your behalf by experience [sic] accountants. Allows you to concentrate on the important part of your business, customer service”.
It is said by the applicant that, since 1 September 2012, Domino’s has required all new Franchise Operators to use DBS for a period of at least two years for services including payroll, bookkeeping, accounting and reports. Further, at all times during the relevant period, Franchise Operators were permitted to opt in to use DBS. The payroll services provided by DBS included processing the weekly payroll, provision of payslips to employees, and preparing the bank upload file for payroll payment to the Franchise Operator. DBS functions also included determining the terms and conditions to be afforded to in-store workers and delivery drivers and calculating the wages to be paid to in-store workers and delivery drivers. The applicant says that the pay rates and other terms and conditions of employment that were supplied or applied by the DBS were drawn from the Agreements, not from the Award.
Second, it is alleged that Domino’s representations and conduct constituted misleading or deceptive conduct or conduct which was likely to mislead or deceive within the meaning of s 18 of the ACL because the two Agreements did not, in fact, govern or provide the wages required to be paid to specified classes of delivery drivers and in-store workers employed by Franchise Operators, styled as Award Workers in the FASOC. The applicant alleges that during the relevant period Award Workers were, in fact, covered by the Award, and that the rates of pay and terms and conditions of employment applicable under the Award are superior to those applicable under the Agreements.
Third, the applicant alleges that the Franchise Operators relied upon Domino’s representations and conduct in paying their delivery drivers and in-store workers in accordance with the Agreements. In part he says that reliance should be inferred because hundreds of Franchise Operators simultaneously elected to pay delivery drivers and in-store workers the rates of pay and afford the conditions of employment derived from the Agreements, doing so after receipt of detailed information from Domino’s about the franchise they operated or proposed to operate which included the representations or involved the conduct referred to above.
Fourth, it is alleged that as a result of Domino’s contravening conduct, the applicant and the group members suffered loss and damage, including:
(a)loss and or damage referable to the difference between the rates of pay and terms and conditions of employment to which the applicant and group members were entitled under the Award as and when that entitlement arose, and the rates and conditions they were in fact paid or afforded by the Franchise Operators; and
(b)the loss of opportunity to pay for goods or services the applicant and group members wished to buy, by reason of the fact that Award wages were not paid to them as and when those wages were required to be paid (being no less often than weekly, as required by the Award).
RELEVANT PRINCIPLES
Domino’s submitted that the requirement for pleadings that comply with the rules is central to proper case management, particularly in a large complex class action like the present case. It cited Oztech Pty Ltd v Public Trustee of Queensland [2019] FCAFC 102; (2019) 269 FCR 349 at [28]-[35] (Middleton, Perram and Anastassiou JJ) where the Full Court said (at [30]):
There should be no doubt about whether any particular cause of action is relied upon. At a minimum, the pleading should be pellucidly clear about the causes of action, or claims, relied upon by the applicant, including any claims made upon an alternative hypothesis. The explicit clarity with which a claim is expressed should ensure that there be no need for the opposite party to closely scrutinise the pleading in a process of textual construction to determine whether a particular fact is relied upon, or the purpose for which it is alleged, much less to decide whether a particular cause of action is raised. The same basic requirement applies to any defence raised in answer to a claim.
It argued that compliance with pleadings principles is not mere pedantry but is a matter of basic procedural fairness, citing, amongst other authorities: Banque Commerciale S.A., En Liquidation v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279 at 286-287 (Mason CJ and Gaudron J); McKellar v Container Terminal Management Services Limited [1999] FCA 1101; (1999) 165 ALR 409 at [22] (Weinberg J); and Ezekiel v Law Society of the Australian Capital Territory [2013] FCA 725 at [40] (Yates J). It said that a properly drawn pleading is fundamental to achieving the overarching purposes of s 37M of the Act by, allowing both the parties and the Court to clearly and precisely understand the issues in dispute at an early stage, define and confine the need for discovery and determine relevant evidence, both for lay and expert, as required, thus ensuring a just, quick and cheap resolution of the real issues in dispute, citing authorities including McGuirk v University of New South Wales [2009] NSWSC 1424 at [21] - [24] (Johnson J) (in the context of s 56 of the Civil Procedure Act 2005 (NSW), the State cognate of s 37M of the FCA); Re Punters Show Pty Ltd [2017] NSWSC 605 at [69] (Black J); Y Primavera v T Bakos [2019] NSWSC 825 at [35] (Black J); Sadie Ville Pty Ltd v Deloitte Touche Tohmatsu (A Firm) [2017] FCA 1202 at [17] (Moshinsky J); Wheelahan v City of Casey (No.12) [2013] VSC 316 at [25] (Dixon J); SMEC Australia Pty Ltd v McConnell Dowell Constructions (Aust) Pty Ltd (No. 2) [2011] VSC 492 at [9] (Vickery J); Downer Connect Pty Ltd v McConnell Dowell Construction (Aust) Pty Ltd [2008] VSC 77 at [1]-[4] (Harper J (as he then was)); Taylor v Lederman [2013] VSC 99 at [3] (Ferguson J (as her Honour then was)); Multigroup Distribution Services Pty Ltd v TNT Australian Pty Ltd [1996] FCA 781 at [2]; (1996) ATPR 41-522 (Burchett J); Truth About Motorways Pty Ltd v Macquarie Infrastructure Investments Management Ltd [1998] FCA 525 at [5]; (1998) ATPR 41-633; (1998) 42 IPR 1 at 5 (Foster J). It contended that the more complex the claims the more important compliance with pleadings rules becomes, citing Wheelahan at [25(e)]; SMEC at [8].
In general terms I have no difficulty accepting the principles in relation to adequacy of pleadings advanced by Domino’s. Two things must, however, be kept in mind.
First, the decision as to whether it is appropriate to strike out a pleading is a case specific enquiry. The application of the principles will differ depending on the case and on the pleading.
Second, different courts from time to time have espoused such principles in terms which are not always consistent. In modern times courts have often taken a less strict approach to the application of such principles, and have preferred to use pre-trial disclosure of evidence and exchange of submissions and interventionist case management techniques to address some of the difficulties sometimes associated with pleadings. I broadly agree with the approach taken by Martin CJ in Barclay Mowlem Construction Ltd v Dampier Port Authority and Another [2006] WASC 281; (2006) 33 WAR 82 at [4]-[7]. His Honour said:
The purposes of pleadings are, I think, well known and include the definition of the issues to be determined in the case and enabling assessment of whether they give rise to an arguable cause of action or defence as the case may be, and apprising the other parties to the proceedings of the case that they have to meet.
In my view, the contemporary role of pleadings has to be viewed in the context of contemporary case management techniques and pre-trial directions. In this Court, those pre-trial directions will almost invariably include; first, a direction for the preparation of a trial bundle identifying the documents that are to be adduced in evidence in the course of the trial; second, the exchange well prior to trial of non-expert witness statements so that non-expert witnesses will customarily give their evidence-in-chief only by the adoption of that written statement; third, the exchange of expert reports well in advance of trial and a direction that those experts confer prior to trial; fourth, the exchange of chronologies; and fifth, the exchange of written submissions.
Those processes leave very little opportunity for surprise or ambush at trial and, it is my view, that pleadings today can be approached in that context and therefore in a rather more robust manner, than was historically the case; confident in the knowledge that other systems of pre-trial case management will exist and be implemented to aid in defining the issues and apprising the parties to the proceedings of the case that has to be met.
In my view, it follows that provided a pleading fulfils its basic functions of identifying the issues, disclosing an arguable cause of action or defence, as the case may be, and apprising the parties of the case that has to be met, the court ought properly be reluctant to allow the time and resources of the parties and the limited resources of the court to be spent extensively debating the application of technical pleadings rules that evolved in and derive from a very different case management environment.
This approach was echoed by the Full Court in Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15 at [13] (Greenwood, McKerracher and Reeves JJ) as follows:
It is well-established that the main purposes of pleadings are to give notice to the other party of the case it has to meet, to avoid surprise to that party, to define the issues at trial, to thereby allow only relevant evidence to be admitted at trial and for the trial to be conducted efficiently within permissible bounds: see, eg Dare v Pulham (1982) 148 CLR 658 (at 664–665). However, it is also well-established that pleadings are not an end in themselves, instead they are a means to the ultimate attainment of justice between the parties to litigation: see Banque Commerciale S.A. (in liq) v Akhil Holdings Ltd (1990) 169 CLR 279 (at 293) per Dawson J who cites Isaacs and Rich JJ in Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490 (at 517). For these reasons, the courts do not, at least in the current era, take an unduly technical or restrictive approach to pleadings such that, among other things, a party is strictly bound to the literal meaning of the case it has pleaded. The introduction of case management has, in part, been responsible for this change in approach: see the observations of Martin CJ in Barclay Mowlem Construction Limited v Dampier Port Authority (2006) 33 WAR 82 (at [4]–[8]). Even before the widespread use of case management, the High Court reflected this approach in decisions such as Leotta v Public Transport Commission (NSW) (1976) 50 ALJR 666 (at 668–669) per Stephen, Mason and Jacobs JJ and Water Board v Maustakas (1988) 180 CLR 491 (at 497) per Mason CJ and Wilson, Brennan and Dawson JJ.
I take the same view, and I approach the application on that basis.
THE LOSS AND DAMAGE PLEADING
The main focus of Domino’s strikeout application is the pleading of loss and damage in paragraphs [63] and [64] of the FASOC. On the basis that paragraphs [63] and [64] should be struck out, Domino’s also sought orders for the entirety of the claim under s 236 of the ACL to be struck out. Domino’s ultimately sought that the entire pleading be struck out.
Paragraphs [63] and [64] allege as follows:
[63]By reason of the conduct pleaded in paragraphs 30, 30A, 34, 34A, 48, 49, 50, 50A, 51 and 51A above, the Award Workers (that is, the Group Members) have suffered loss and damage as a result of the contraventions by Domino’s.
Particulars
1.The loss and damage suffered by the Award Workers (that is, the Group Members) because of the contravening conduct engaged in by Domino’s is the harm to the economic interests of the Award Workers by reason of the fact that they:
(A)were not paid the wages to which they were entitled during the period of their employment by Franchise Operators as and when those wages fell due to be paid and were required to be paid, namely at no less than weekly intervals (as is required by clause 9 of the Award), being:
(i)the loss of the opportunity to pay for goods or services the Award Workers needed or wanted to buy during their period of employment by a Franchise Operator; and
(ii)the loss of the opportunity to pay for goods or services of superior quality than those which the Award Workers in fact bought during their period of employment by a Franchise Operator.
And
(B)were paid less than the wages to which they were entitled pursuant to the terms of the Award and were afforded conditions of employment of lesser value than those to which they were entitled pursuant to the terms of the Award during the period of their employment by Franchise Operators, namely:
(i)the difference between the rates of pay to which the Award Workers were entitled under the Award and the rates the Award Workers were in fact paid by Franchise Operators, being the rates derived from the Agreements as affected by the Deemed Base Rates;
(ii)the difference in the value of the terms and conditions of employment to which they were entitled under the Award and the terms and conditions of employment in fact afforded to them by Franchise Operators derived from the Agreements.
(iii) interest in relation to (i) and (ii) above.
And
(C)were not afforded the conditions of employment to which they were entitled pursuant to the Award during each shift that they worked during their period of employment with Franchise Operators, including the failure to roster Award Workers for shifts of a minimum of three hours duration, namely the loss of one hour’s pay at the Award rate each time the Award Workers worked a two hour shift, rather than a three hour shift as required by the Award.
[64]By reason of the conduct pleaded in paragraphs 50, 50A, 51, 51A, 56, 57 and 58 above, the applicant has suffered loss and damage as a result of the contraventions by Domino’s.
Particulars
1.The loss and damage suffered by the applicant because of the contravening conduct engaged in by Domino’s is the harm to the economic interests of the applicant by reason of the fact that he:
(A)was not paid the wages to which he was entitled during the period of his employment by Dominoids and by MC Pizza as and when those wages fell due to be paid and were required to be paid, namely at no less than weekly intervals (as is required by clause 9 of the Award), being:
(i)the loss of the opportunity to pay for goods or services the applicant needed or wanted to buy during his period of employment by Dominoids and MC Pizza; and
(ii)the loss of the opportunity to pay for goods or services of superior quality than those which the applicant in fact bought during his period of employment by Dominoids and MC Pizza.
where the goods and services referred to in (i) and (ii) above included items for the applicant’s infant son born in 2016 and maintenance and repairs on a 1998 Toyota RAV4 which he owned.
And
(B)was paid less than the wages to which he was entitled pursuant to the terms of the Award and was afforded conditions of employment of lesser value than those to which he was entitled pursuant to the terms of the Award during the period of his employment by Dominoids and MC Pizza, namely:
(i)the difference between the rates of pay to which the applicant was entitled under the Award and the rates the applicant was in fact paid by Dominoids and MC Pizza, being the rates derived from the Agreements as affected by the Deemed Base Rates;
(ii)the difference in the value of the terms and conditions of employment to which the applicant was entitled under the Award and the terms and conditions of employment in fact afforded to him by Dominoids and MC Pizza derived from the Agreements; and
(iii) interest in relation to (i) and (ii) above.
And
(C)was not afforded the conditions of employment to which he was entitled pursuant to the Award during each shift that he worked during his period of employment with Dominoids and MC Pizza, including the failure to roster the applicant for shifts of a minimum of three hours duration, namely the loss of one hour’s pay at the Award rate each time the applicant worked a two hour shift, rather than a three hour shift as required by the Award.
2.Further particulars of the loss suffered by the applicant will be provided following discovery and the return of subpoena.
It is necessary to briefly summarise paragraphs [30], [30A], [34], [34A], [48], [49], [50], [50A], [51], [51A], [56], [57] and [58] which sit behind the allegation of loss and damage in paragraphs [63] and [64]. They set out the applicant’s allegations that by its representations and conduct in contravention of s 18 of the ACL, Domino’s conveyed misleading express and implied representations (broadly to the effect that the Award did not apply to identified classes of delivery drivers and in-store workers) to Prospective Franchise Operators and Franchise Operators, upon which representations the Prospective Franchise Operators and Franchise Operators relied and paid delivery drivers and in-store workers the rates of pay and afforded the terms and conditions of employment under the Agreements rather than under the Award.
(a)paragraph [30] sets out six similar representations alleged to have been conveyed by Domino’s to Franchise Operators and to Prospective Franchise Operators in respect to the rates of pay and conditions of employment applicable to the group members, broadly to the effect that the Agreements rather than the Award applied, called the Franchise Representations;
(b)the cognate allegations to paragraph [30] relating to the applicant are in paragraphs [50] and [51]. Paragraph [50] alleges that, as part of the Franchise Representations, Domino’s conveyed five similar representations to Dominoids, which was the applicant’s employer in the period from October 2015 to July 2016, broadly to the effect that the Agreements rather than the Award applied, called the Dominoids Representations. Paragraph [51] makes the similar allegations in relation to MC Pizza, which was the applicant’s employer in the period from October 2015 to July 2016, called the MC Pizza Representations;
(c)in the alternative, paragraph [30A] sets out the same six representations alleged in paragraph [30] to have been conveyed by Domino’s in respect of the rates of pay and conditions of employment applicable to the group members, except that they are said to be representations of opinion and that Domino’s had reasonable grounds for those opinions, called the Franchise Opinion Representations;
(d)the cognate allegations to paragraph [30A] in respect of the applicant are in paragraphs paragraphs [50A] and [51A]. Paragraph [50A] alleges that, as part of the Franchise Opinion Representations, Domino’s made the same representations of opinion to Dominoids, called the Dominoids Opinion Representations. Paragraph [51A] makes the same allegation in relation to MC Pizza called the MC Pizza Opinion Representations;
(e)paragraph [34] alleges that Domino’s conduct in engaging in the Compliance and Audit Activities alleged in paragraph [32] and Domino’s provision of the Payroll Services to Franchise Operators alleged in paragraphs [33] and [33A] (together and severally the Franchise Conduct), gave rise to four implied representations broadly to the effect that the minimum rates of pay and the minimum terms and conditions of employment of delivery drivers and in-store workers that could lawfully be paid and afforded were those contained in the Agreements; specifically, that the Franchise Conduct constituted implied representations that by engaging DBS for the provision of services including payroll services, and/or by using the TANDA system, Franchise Operators would pay rates of pay and terms of conditions of employment to delivery drivers and in-store workers that were compliant with applicable industrial laws; further that by reason of the Franchise Conduct, Domino’s engaged in conduct which conveyed that the minimum rates of pay and terms and conditions of employment were those contained in the Agreements and provided by payroll services.
(f)Paragraph [34A] alleges the same conduct by Domino’s alleged in paragraph [34] except that the implied representations are said to be representations of opinion and that Domino’s had reasonable grounds for those opinions, called the Franchise Opinion Conduct;
(g)paragraphs [48] and [49] allege reliance by the Franchise Operators. They allege that, in reliance on the Franchise Representations and the Franchise Opinion Representations, and/or because of the Franchise Conduct and/or Franchise Opinion Conduct, in the relevant period Franchise Operators engaged workers, including workers who were in fact covered by the Award, to work for the rates of pay and terms and conditions set out in the Agreements rather than those set out in the Award to which they were entitled; and
(h)paragraphs [56], [57] and [58) allege reliance by Dominoids and MC Pizza in respect to the rates of pay and terms and conditions of employment applicable to the applicant. Paragraph [56] alleges that, in reliance on the Dominoids Representations and/or the Dominoids Opinion Representations, Dominoids employed workers, including the applicant and other workers covered by the Award, to work on the rates of pay and terms and conditions set out in the Agreements, and did not pay the applicant and Award Workers the rates of pay or afford the terms and conditions of employment provided for in the Award to which they were entitled. Paragraph [57] makes the same allegation in relation to MC Pizza. Paragraph [58] alleges that because of the matters pleaded in paragraphs [56] and/or [57] the applicant was paid the rates of pay and terms and conditions of employment under the Agreements instead of the rates of pay and terms and conditions under the Award to which he was entitled.
Domino’s submissions
The alleged failure to adequately plead loss and damage
Domino’s cited Sellars v Adelaide Petroleum [1994] HCA 4; (1994) 179 CLR 332 at 348; (1994) 120 ALR 16 at 27 (Mason CJ, Dawson, Toohey and Gaudron JJ) for the proposition that loss or damage is the gist of a claim for compensation under s 236 of the ACL for contravention of s 18, which are the successors to ss 82 and 52 of the Trade Practices Act 1974 (Cth) (the TPA). It submitted that the existence of loss or damage is for the applicant to prove and therefore to plead. It drew a distinction between “damage”, being the injury or harm sustained, and “damages” being the amount sought to be awarded by a court on account of the damage alleged to have been caused by contravening conduct.
Domino’s contended that in the context of an economic or financial interest, “loss or damage” equates to the “harm” done to that interest. It said that the cause of action of the applicant and group members under s 236 of the ACL is incomplete unless and until loss or damage has been suffered and said that paragraphs [63] and [64] of the FASOC fail to identify the economic interest of the applicant and group members alleged to have been harmed, how their economic interests are said to have been harmed, nor plead what acts or omissions may be said to have caused the alleged harm. Domino’s argued that the FASOC confuses “damage” with “damages”, and said that the particulars to paragraphs [63] and [64] merely set out what will be said to be the measure of compensation sought, but do not identify the economic interest lost or said to have been harmed by Domino’s conduct. It said that if, for example, the economic interest relied on by the applicant and group members is the satisfaction of their entitlements under the Award, the applicant must plead that economic interest, and that it is that interest that has been lost or injured, and how. On its argument no such loss or harm is pleaded as a material fact or otherwise, and it is not apparent how that interest could have been so harmed.
Domino’s submitted that an action for monies payable for unpaid entitlements under an industrial award is not an action for damages, citing Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 425-6 (Brennan CJ, Dawson and Toohey JJ), for the proposition that award entitlements are “statutory debts” imported into the employment relationship and do not depend on the terms of the employment contract. The plurality referred to Mallinson v Scottish Australian Investment Co Ltd [1920] HCA 51; (1920) 28 CLR 66 and described the ratio in that case, which considered a right under the Conciliation and Arbitration Act 1904 (Cth), as saying that an entitlement to be paid the difference between what an employee was paid by their employer (where it was lower) and the higher amount pursuant to an award was a “debt pursuant to an obligation created by statute” (at 418). Similarly, referring again to Mallinson, the plurality said that that “[i]n that case the nature of the cause of action which was held to arise was that of debt, the obligation giving rise to the debt being statutorily created” it is a claim “not for damages” (at 424).
Domino’s also cited Byrne (at 424) where the plurality said that the decision in Mallinson was not authority for the existence of a cause of action for damages for breach of statutory duty consequent upon a breach of an industrial award. The plurality said that “the nature of the cause of action which was held to arise was that of debt, the obligation giving rise to the debt being statutorily created. Debt is a form of action for a liquidated sum and not for damages.”
Domino’s said that if the applicant and the delivery drivers and in-store workers employed by its Franchise Operators during the relevant period were covered by the terms of the Award, (and were therefore Award Workers as the applicant alleges) the character of their alleged interest is that of a statutory debt which is due and owing to them by the relevant Franchise Operator. It contended that the fact that the applicant and group members claim to have suffered loss and damage because - in reliance upon alleged misleading representations and conduct by Domino’s, Franchise Operators failed to pay them their entitlements under the Award - does not change the character of their claims as “statutory debts”. It said that the fact that a claim by an employee for underpayment of award entitlements arises because of the alleged conduct of a third person (in the present case Domino’s) cannot change the character of the employee’s claim.
On its argument, the interests of the applicant and group members in receiving any unpaid entitlements they have under the Award are capable of calculation and enforcement by them against the relevant Franchise Operator, and thus their economic interests have not been injured, lost or damaged by any conduct on the part of Domino’s. If they enforce their right to payment of their entitlements under the Award from their employers the statutory debt will then be discharged. Upon discharge of the debt the applicant and those group members would no longer have any right to recover against the relevant Franchise Operator or anyone else, including Domino’s, in respect of that discharged economic interest.
Domino’s also described paragraphs [63] and [64] as a pleading of a conclusion which does not identify any particular injury to the economic interest of the applicant and group members that would be compensable. It said that if the applicant wishes to make a claim of damage to his financial interests he must identify that interest. If the financial interest is his entitlement to payment of wages under an award the applicant must allege “the injury is that we have lost our award entitlement”, and cannot simply plead that he has not been paid those entitlements. It characterised the particulars as merely pleading “a delay in payment” of the award entitlement of the applicant and group members. It submitted that the applicant and group members having not been paid their entitlements under the Award does not mean that those entitlements will not be paid.
Domino’s raised the risk of double recovery through the failure of the pleading to identify the economic interest which had been lost or damaged. It said that if the applicant and group members succeeded in their claim against Domino’s and then proceeded under the FW Act against their employers, the Franchise Operators would have no option but to pay any entitlements due under the Award as that is what the FW Act provides.
Domino’s also contended that before the applicant and group members can show that they have suffered loss and damage “because of” Domino’s misleading conduct, as required by s 236 of the ACL, they must show that their position has been altered to their detriment because of the Franchise Operator’s reliance on the alleged contravening conduct, and they have not properly pleaded the causal link between loss and damage. It said that they cannot do so, nor establish loss and damage, when any right they have to recover any unpaid Award entitlements from the Franchise Operators remains intact.
In an alternative argument, Domino’s accepted that the right to bring an application seeking award entitlements against an employer under the FW Act would be damaged or lost if the employer had gone into liquidation, and that in such circumstances a claim might be available under the ACL if the lost right was causally related to the alleged misleading or deceptive conduct.
The contention that the FW Act is an exclusive code
In the alternative Domino’s argued that a claim under s 236 of the ACL is not available to the applicant and group members as a matter of law. That is, that the pleading of loss and damage discloses no reasonable cause of action.
It said, and it is common ground between the parties, that the FW Act creates the obligation for parties to a modern award to be bound by its terms, and provides specific mechanisms for obtaining orders in relation to contravention of an award and for compensation to be awarded upon a finding of contravention. It is uncontentious that the FW Act provides a comprehensive regime for enforcement of rights and entitlements under a modern award.
Domino’s submitted that any rights the applicant and group members have to payment of any entitlements under the Award are rights created by the FW Act, and the FW Act delineates the remedies that are available for the contravention of those rights and the means by which they are to be enforced, including in relation to limitation periods. It said that the fact that the FW Act creates the right to entitlements under an award, together with a remedy for the enforcement of award entitlements, demonstrates that Parliament intended the statutory remedy to be exclusive and, relevantly, against the person contravening the FW Act. On its argument the FW Act sets out a code in relation to an employee’s rights in relation to his or her entitlements under an award.
It said that the claim by the applicant and group members under the ACL, which it characterised as their seeking recovery of their alleged unpaid Award entitlements through a claim for misleading or deceptive conduct, is not available at law. It relied on the rule in Pasmore v Oswaldtwistle Urban District Council (1898) AC 387 at 394 where the Earl of Halsbury L.C. said:
The principle that where a specific remedy is given by a Statute, it thereby deprives the person who insists upon a remedy of any other form of remedy than that given by the Statute, is one which is very familiar and which runs through the law. I think Lord Tenterden accurately states that principle in the case of Doe v Bridges. He says: “where an Act creates an obligation and enforces the performance in a specified manner, we take it to be a general rule that performance cannot be enforced in any other manner.
The rule is recognised in Pearce and Geddes, Statutory Interpretation in Australia (ninth edition at 5.52) which states:
If legislation includes a remedy for breach no other remedy is available
This assumption was defined by Brett MR in Bailey v Bailey (1884) 13 QBD 855 at 859 as follows:
It is an old and well-known rule of construing statutes that when a special remedy is given for the failure to comply with the directions of the statute that remedy must be followed, and no other can be supposed to exist.
The authors went on to note that “[a]s always, a contrary intention may displace the presumption…”
Domino’s submitted that while the rule in Pasmore is one of broad application, it has been repeatedly applied in the context of the enforcement of entitlements under industrial awards. In Josephson v Walker [1914] HCA 68; (1914) 18 CLR 691, at 695, 697 (Griffith CJ), and 700-702 (Isaacs J), (Power J agreeing) the rule was applied in the context of enforcement of entitlements under an industrial award made under the Industrial Arbitration Act 1912 (NSW). In that case Mr Walker sought a declaration in the Supreme Court of NSW in relation to unpaid wages due pursuant to certain industrial awards. Mr Josephson demurred to the declaration on the ground that the Supreme Court of New South Wales had no jurisdiction to entertain the cause of action.
Isaacs J said the following (at 700-701) as follows:
It is an action to enforce payment of moneys due to the plaintiff, not by virtue of a contract, express or implied, but by virtue of a statutory obligation….
…the present case is avowedly not based on contract at all. For a considerable time wages were paid and accepted as correct on a lower basis than, as is now considered by the plaintiff, the award attaches to the class of work done. And the unpaid balance is claimed as due by virtue, not of a common law contract, but of the statutory obligation which subsists notwithstanding any agreement to the contrary – no man being capable under the Statute of contracting himself out of his rights or obligations in this respect. The right claimed is a new right. It is a right which was unknown before to the law: a right to receive from an employer more than was bargained for. Parliament has on the ground of public policy found that that is a just and a necessary right. But it is a new one. And in the same section we find that Parliament has also enacted a new and special mode of enforcing that right. If the right had been simply created and no specific method of enforcement had been pointed out, the existing law itself would have provided a method through any Court already invested with jurisdiction to determine a claim of that nature (Doe d. Bishop of Rochester v Bridges). But a specific method having been created, it becomes a question whether that method is exclusive or not. That depends, not upon any rigid rule but upon the intention of Parliament appearing from the Act.
Prima facie, where the same Statute creates a new right and specifies the remedy, that remedy is exclusive. The natural presumption to begin with is that Parliament in creating the novel right attaches to it the particular mode of enforcement as part of its statutory scheme. To that extent the enactment is a code. Pasmore’s Case (1898) A.C. 387 is the leading authority.
At 701-702 Isaacs J said:
But on examination of the legislation, the legislative intention may be found to be different. In Brain v Thomas 50 L.J.Q.B. 662 at 663 Lord Selborne LC, in speaking of a rule on conduct made under a certain Statute, said: “…The ground is said to be that where a Statute creates an offence, and defines particular remedies against the person committing that offence, primâ facie the party injured can avail himself of the remedy so defined, and no other. I see no reason to call that rule in question. But it must be examined with reference to the terms in which the statute deals with the subject.”
So that the terms of this Statute must be looked at…. If the fair reading of the Statute leads to the view that Parliament intended to create the right absolutely and independently of any specific form of remedy, the respondent’s action is well brought. If on the other hand the proper construction is that the right and the remedy are inseparable, that they are combined and essential parts of a new scheme of public policy, then the action is wrongly conceived and the demurrer is right.
Domino’s argued that in Byrne the High Court took the same approach to construing the operation of the Industrial Relations Act 1988 (Cth) (the IR Act) as it took in 1914 to the construction of the Industrial Arbitration Act 1912 (NSW). In Byrne at 420 the plurality said:
A right to the payment of award rates is imported by statute into the employment relationship, which is contractual in origin, and, express promise apart, it is only in that sense that it can be said that award rates are imported into the contract of employment. The award regulates what would otherwise be governed by the contract. But award rates are imported as a statutory right imposing a statutory obligation to pay them. The importation of the statutory right into the employment relationship does not change the character of the right.
Domino’s noted that the plurality said (at 426) (in relation to whether the appellants in Byrne could establish the existence of a cause of action for damages for breach of statutory duty consequent upon a breach of the relevant award) that “as a matter of construction, awards cannot in our view be regarded as conferring private rights enforceable by way of an action for damages. When regard is had to the enforcement mechanism provided by the Act, the situation is even plainer.”
It also relied on the remarks of McHugh and Gummow JJ in Byrne at 456:
Counsel for the respondent referred to the long line of authority propounding the general rule that, where a statute creates an obligation and enforces performance in the specified manner, performance is not to be enforced in any other manner. In Josephson v Walker, this Court applied that reasoning to the construction of the Industrial Arbitration Act 1912 (NSW). Section 49 of that statute created procedures for enforcement of obligations imposed on employers by an award. The Court held an action did not otherwise lie at general law for recovery by the employee of the difference between wages paid under the contract of employment and those payable under an award. This was because the legislation did not make the statutory rate of wages part of the contract of employment; rather, a new right was created with an inseparable new remedy. Their Honours pointed out that, upon an examination of the particular statute, it might be found that the legislative intention was different. Thus the intention, as one would expect, was that of the Parliament not of the body making the award, in that case the New South Wales Court of Industrial Arbitration.
(Citations omitted.)
Further, Domino’s relied on Construction, Forestry, Mining and Energy Union v Gordonstone Coal Management Pty Ltd [1997] FCA 1014; (1997) 78 FCR 437 (Burchett J), in which the applicant brought an application for an interlocutory injunction to restrain the respondent employer from contravening a clause of an industrial agreement, certified under the Workplace Relations Act 1996 (Cth) (the WR Act), a predecessor to the FW Act. Burchett J held that the WR Act did not contain a power to order an interlocutory injunction, and that the general power to order injunctive relief in s 23 of the FCA was not a source of power for such relief in relation to an alleged contravention of a certified agreement. In effect his Honour held (at 441) that the only remedies for enforcement of rights under a certified agreement were those in the WR Act, citing Josephson and Byrne. His Honour concluded that the Court had no jurisdiction to grant such interlocutory relief.
Domino’s accepted the applicant’s contention that the FW Act is in different and broader terms than the industrial legislation considered in Josephson and Byrne, but said that Parliament’s intention was to provide an additional armoury for contraventions of the FW Act, for example by allowing the recovery of interest on late payment of award entitlements, a power to grant an injunction, a power to enforce award entitlements against a person involved in a contravention of a civil remedies provision, and more recently to provide a direct cause of action against a franchisor. It said that the FW Act comprises a code in relation to the enforcement of entitlements under an award and no other cause of action is available. On its argument the applicant and group members could only seek to recover their Award entitlements through a proceeding under the FW Act, that is, an action under ss 539 and 545 for a contravention of s 45, and they could not by a “sidewind” use the ACL to get around or supplement those rights or mode of enforcement.
Domino’s also argued that the reasoning in Josephson and Gordonstone applies to the applicant’s claim for a declaration of a contravention of s 18 of the ACL, which does not include a claim for damages. Ultimately it said that the applicant and group members are precluded “in absolute terms” from bringing the present proceeding, including the application for declaratory relief.
The loss of opportunity claim
Domino’s submitted that the pleading of the loss of opportunity claim in paragraph [64] is deficient. In the particulars to paragraph [64] the applicant claims to have suffered the loss of his opportunity to pay for the goods and services he needed or wanted, or to pay for goods of superior quality than those which he in fact bought. He says that those goods and services included items for the applicant’s infant son born in 2016 and for the maintenance and repairs of a 1998 Toyota RAV4 which he owned.
It argued, first, that the provision of particulars cannot cure the gap arising from the applicant’s failure to properly plead loss or damage as a material fact, citing Bond Corp Pty Ltd v Thiess (1987) 14 FCR 215 at 222-3; (1987) 71 ALR 615 (French J (as his Honour then was)). Second, it said that the loss of opportunity claim is opaque and embarrassing and ought be struck out. It cited Sellars at 347 where Mason CJ, Dawson, Toohey and Gaudron J explained the elements of a loss of opportunity claim under s 82 of the TPA, which remarks apply equally to a claim under s 236 of the ACL. The plurality said (at 348):
In the context of contraventions of s 52(1) in the form of misleading conduct constituted by misrepresentations, acts done by the representee in reliance upon the misrepresentations amount to a sufficient connexion to satisfy the concept of causation. And, if those acts result in economic or financial loss, it will ordinarily be recoverable under s 82(1). So, in a case such as the present, the applicant is entitled to recover “a sum representing the prejudice or disadvantage [the applicant] has suffered in consequence of his altering his position under the inducement” (citation omitted).
The prejudice or disadvantage which the respondents suffered in the present case was the loss of the opportunity or chance of securing commercial benefits which entry into the Pagini agreement and completion of it would have brought. The lost opportunity or chance, assuming it to have value, as a form of economic loss. The question, therefore, is: how is the value of that lost opportunity or chance to be measured?
Domino’s contended that the FASOC was required but failed to:
(a)identify the opportunity that was lost. It asserts that all the particulars do is provide a past hypothetical that the applicant would have spent additional money on extra consumables or better quality consumables, which is insufficient;
(b)that if the applicant had that extra money he could have and would have spent that money on those consumables;
(c)if he obtained that extra money today, he can no longer buy those consumables, that being the “lost opportunity”; and
(d)that opportunity had some compensable value, being more than negligible.
It also contended that the loss of opportunity claim is not available to the applicant because any such claim could be included in a claim for compensation under the code in the FW Act.
Consideration
I am not persuaded that it is appropriate to strike out the pleading of loss and damage in [63] and [64] of the FASOC.
The application of the pleadings principles
At least in relation to the loss and damage pleading, the general principles in relation to the adequacy of pleadings on which Domino’s relied are not central to Domino’s submissions.
At the core, Domino’s submissions regarding the loss and damage pleading revolved around two related contentions. It argued that:
(a)the applicant and group members could not show that they suffered loss or damage because their ability to recover any unpaid entitlements under the Award from their employers, the Franchise Operators, has not been damaged or lost, as they have the ability to commence a proceeding under the FW Act for contravention of the Award and for compensation if they so choose. Based on that, Domino’s submitted that paragraphs [63] and [64] do not clearly articulate the economic interest(s) of the applicant and group members that are alleged to have been lost or damaged, and does not plead material facts to show how such economic interest(s) have been lost or damaged; and
(b)the FW Act constitutes an exclusive code in relation to the enforcement of entitlements under an award, which operates to preclude the applicant and group members from bringing a claim for loss or damage under s 236 of the ACL for contravention of s 18.
In response, the applicant did not dispute that he and the group members have rights to bring a proceeding under the FW Act to seek a finding of contravention of s 45 against the relevant Franchise Operator under s 539 and an order for compensation under s 545. The applicant accepted the existence of such rights. Rather, the applicant said that the availability of remedies against their employer under the FW Act (and/or against Domino’s as an accessory), did not preclude them from bringing a claim for damages against Domino’s under the ACL for misleading or deceptive conduct. The applicant submitted that to succeed in an action under the ACL there is no requirement for him to show, and therefore to plead, that his rights (and those of the group members) to recover any unpaid Award entitlements through an action under the FW Act have somehow been damaged or lost.
Boiled down, the differences between the parties in relation to the loss and damage pleading, are not differences based in the application of the general principles referred to above. The real question is whether the claim under s 236 of the ACL, as pleaded, discloses a reasonable cause of action, see: r 16.21(e) of the Rules.
For the reasons I now explain, I am satisfied that the loss and damage pleading discloses a reasonable cause of action. Whatever other deficiencies there may be in the loss and damage pleading they are insufficient to justify striking out those parts of the FASOC.
The high bar that Domino’s faced
Domino’s faced a high bar in seeking that the loss and damage pleading, indeed the entire claim under s 236 of the ACL, be struck out on that basis that it does not disclose a reasonable cause of action.
In Wride v Schulze [2004] FCAFC 216 at [25]-[26] (Spender, Tamberlin and Bennett JJ), the Full Court explained that for the purpose of a strikeout application a “reasonable cause of action” means “one which has some chance of success if regard is had only to the allegations and the pleadings relied on by the applicant.” Their Honours endorsed the statement of principles in Allstate Life Insurance Co v Australia & New Zealand Banking Group Ltd (unreported, Beaumont J, 13 September 1994), cited with approval by Lindgren J in National Mutual Property Services (Australia) Pty Ltd v Citibank Savings Ltd (1995) 132 ALR 514 at 529, as follows:
(1)A ‘reasonable cause of action’ means one with some chance of success if regard be had only to the allegations in the pleadings relied upon by the claimant; in such a case, the claim cannot be struck out: Davey v Bentinck [1893] 1 QB 185.
(2)The mere fact that the case appears to be a weak one is not of itself sufficient to justify the striking out of the action: cf Wenlock v Moloney [1965] 1 WLR 1238.
(3)Normally, the power to strike out should be exercised only in plain and obvious cases, where no reasonable amendment could cure the alleged defect: cf Hodson v Pare [1899] 1 QB 455.
(4)It goes without saying that if a substantial case is involved in the claim, the power to strike out cannot be exercised.
(5)Where a point of law has to be decided, and the judge is satisfied that this can be done by him appropriately, thereby avoiding the necessity of, and expense in going to trial, he is entitled to determine the point: cf Williams& Humbert v W & H Trade Marks [1986] AC 368.’
Having regard to these principles it is generally accepted that the power to strike out a pleading under r. 16.21 of the Rules “must be exercised with caution and should only be exercised in the plain and obvious case”: Polar Aviation Pty Ltd v Civil Aviation Safety Authority (No 4) [2011] FCA 1126; (2011) 203 FCR 293 at [10] (Kenny J). In that case her Honour referred with approval to Energex Limited v Alstom Australia Limited [2005] FCAFC 215; (2005) 225 ALR 504 at 512 [28] (French J (as his Honour then was), Hely and Merkel JJ) where the Full Court said that, similar to the power to order summary judgment, the power to strike out a pleading where it will lead to a summary disposition of the proceedings “should not be exercised unless it is obvious that there is no real question to be tried.”
Recently, the Victorian Court of Appeal in Uber Australia Pty Ltd v Andrianakis [2020] VSCA 186 (Niall, Hargrave and Emerton JJA) considered an application for an order under r 23.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) to strike out the statement of claim as either not disclosing a cause of action or being embarrassing. Their Honours said (at [35]):
Uber’s contentions on ground 1 fail to grapple with the high hurdle it must cross, and the low bar confronting the plaintiff. When a defendant contends that a statement of claim should be struck out because it does not disclose a cause of action it is necessary for a defendant in the position of Uber to establish that it would be futile to allow the statement of claim to go forward, because it raises a claim that has no real prospect of success in the sense of being ‘fanciful’. It follows that, where there is a contentious or debatable point of law which arises on a pleading, it is usually inappropriate for a trial judge or the Court of Appeal to determine the issue on a strike-out application, particularly where the answer may depend upon the factual context.
While Domino’s submissions are not without merit, it did not get over the substantial hurdle it faced in seeking that the Court determine, at a preliminary stage, and without evidence as to the full factual context, the novel questions that arise in the case. The case raises debatable questions of law which are better resolved in the context of all the evidence rather than by reference to only the allegations and the pleadings. Domino’s did not persuade me that it is plain or obvious that applicant has no real prospect of success in the sense of the claim under the ACL being “fanciful”.
I now turn to deal with Domino’s arguments in more detail but it should be kept in mind that I express these views only for the purpose of resolving the strikeout application. For the purpose of this application I need only be satisfied that there is a reasonable basis for the applicant’s case. If it is necessary to deal with these or similar issues at trial my ultimate conclusion may be different.
Whether the FW Act is an exclusive code?
It is common ground that the FW Act creates the obligation for parties to an award to be bound by its terms, and provides specific mechanisms for obtaining orders in relation to contravention of an award and for compensation to be awarded in respect of loss or damage upon a finding of contravention. The FW Act provides as follows:
(a)section 45 provides that “a person must not contravene a term of a modern award”;
(b)section 48(1) provides that a modern award covers an employee or employer if the award is expressed to do so. It is alleged that during the relevant period delivery drivers and in-store workers employed by the Franchise Operators were covered by the Award;
(c)item 2 of the table in section 539 in Pt 4-1, Div 2, provides that s 45 is a civil remedy provision and that, amongst other persons, an employee may apply to specified courts, including this Court, for orders in relation to a contravention or proposed contravention of the section;
(d)section 540(1)(a) provides that an employee may apply for an order under Pt 4-1, Div 2 in relation to a contravention or proposed contravention of a civil remedy provision, only if the employee is affected by the contravention or will be affected by the proposed contravention;
(e)section 544 provides that, subject to some exceptions which are not relevant in this case, a person may only apply for an order in relation to a contravention of a civil remedy provision if the application is made within six years after the day on which the contravention occurred;
(f)s 545(1) provides that this Court “may make any order the court considers appropriate if the Court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision” (emphasis added);
(g)s 545(2)(b) relevantly provides, without limiting subsection (1), that orders that this Court may make include “an order awarding compensation for loss that a person has suffered because of the contravention” (emphasis added);
(h)s 545(5) provides that a court must not make an order in relation to an underpayment that relates to a period that is more than six years before the proceedings commenced;
(i)s 547 provides that where a person is required to pay, whether on their own behalf or on behalf or another, an amount to a person by an order (other than a pecuniary penalty order) made under Div 2, the Court must include, on application, an amount of interest on the sum ordered, unless good cause is shown to the contrary;
(j)s 550 in Div 4 provides that a person who is involved in the contravention of a civil remedy provision, such as s 45, is taken to have contravened that provision. That is, it permits proceedings to be brought against an accessory; and
(k)since 15 September 2017, ss 558A and 558B of the FW Act have provided a right by an employee to enforce payment of award entitlements, among other civil remedies, owed by a franchisee by proceeding directly against a head franchisor or relevantly related holding company.
Domino’s contention that the FW Act comprises a comprehensive code for the enforcement and recovery of entitlements under an award and that no claim in relation to award entitlements is available to the applicant and group members under the ACL is not without force. It is, however, at least reasonably arguable that a claim under the ACL is also available to the applicant and group members.
First, Byrne does not directly relate to the position in the present case. It concerned whether the terms of an award were to be implied into a contract of employment, such that the right to payment of wages payable under an award gave rise to a private right to sue for damages for breach of the contract, and whether breach of the award gave rise to a claim for damages for a breach of statutory duty. It did not deal with the availability of a claim under s 82 of the TPA (and by analogy s 236 of the ACL) for loss and damage suffered because of misleading or deceptive conduct. Unlike the position in Josephson, Byrne and the other authorities on which Domino’s relied, the question in the present case is not whether the FW Act operates to exclude rights to relief under the common law, such as for damages for breach of a contract of employment or damages for breach of a statutory obligation, but whether on its proper construction the FW Act operates to preclude rights to relief otherwise available under the TPA (and its successor the ACL).
The presumption in Pasmore is closely related to the principle that where a statute creates a new right or obligation without specifying the remedy or means of enforcement, the common law will supply one: Doe d Rochester (Bishop) v Bridges (1831) 1 B&Ad 847 at 859; 109 ER 1001 at 1006 (Lord Tenterden CJ for the Court). Josephson and Byrne refer to the principle in Pasmore in the factual context of those cases which concerned the availability of causes of action in contract or tort. It is reasonably arguable that those authorities do not mean that the applicant and group members’ claim under the ACL is precluded by the FW Act.
Second, Domino’s argument boils down to the proposition that it is not open to bring a claim for loss and damage under s 236 of the ACL where the claim is somehow factually referrable to an alleged entitlement to unpaid amounts due under an award. But the FW Act does not state that it operates as an exclusive code. It does not, in terms, set up a regime under which the only means by which a party can obtain redress for a loss which is measured by reference to the gap between wages due under an industrial instrument and the amount they were actually paid, is under the FW Act. Nor does the FW Act state in terms that a person cannot commence an action under the ACL, against a person other than his or her employer, for such loss and damage.
When Parliament passed the FW Act in 2009 it should be taken to have been aware of the existence of other causes of action under other statutory regimes, including under s 82 of the TPA for misleading or deceptive conduct in contravention of s 52 of that Act. I express this view cautiously as the parties’ submissions did not address these principles, but in my view Domino’s argument that the FW Act operates to preclude relief otherwise available under the TPA (and the ACL) engages the principles of statutory construction relating to implied repeal, derogation or alteration of an earlier statute.
In Shergold v Tanner [2002] HCA 19; (2002) 209 CLR 126 at [34] (Gleeson CJ, McHugh, Gummow , Kirby and Hayne JJ) the Court cited with approval Sarawati v The Queen [1991] HCA 21; (1991) 172 CLR 1 at 17 (Gaudron J) where her Honour said:
It is a basic rule of construction that, in the absence of express words, an earlier statutory provision is not repealed, altered or derogated from by a later provision unless an intention to that effect is necessarily to be implied. There must be very strong grounds to support that implication, for there is a general presumption that the legislature intended that both provisions should operate and that, to the extent that they would otherwise overlap, one should be read as subject to the other: see Butler v Attorney General (Vict) (citation omitted).
At the time of enacting the FW Act this Court had jurisdiction for actions brought for compensation under s 82 of the TPA for loss and damage suffered by contravention of s 52, (which jurisdiction was maintained when analogous provisions were enacted in the ACL). A finding of inconsistency between the asserted code in ss 539 and 545 of the FW Act and the broad and remedial provisions in ss 52 and 82 of the TPA (at least in relation to claims of misleading and deceptive conduct where the loss is said to be related to underpayment of award entitlements), would lead to the implied repeal of the TPA provisions by necessary implication to the extent of the inconsistency: Goodwin v Phillips [1908] HCA 55; (1908) 7 CLR 1 at 7 (Griffiths CJ).
In the absence of express words there must be very strong grounds to support such an implication because there is a general presumption that the legislature intended that the provisions of both Acts should operate. The presumption that Parliament intended both statutes to operate is strong given that modern standards of parliamentary drafting are high: United States v Jennings [1983] 1 AC 624 at 643 (Lord Roskill, Lords Fraser, Scarman, Bridge and Brightman agreeing). In Shergold at [27] the Court said that it is to be expected that Parliament will clearly state its will “where the Parliament, by redefining the jurisdiction of a federal court, withdraws rights and liabilities from what otherwise would be the engagement of Ch III”.
The principles relating to incompatibility of earlier statutes with later enactments were explained in Shergold by reference to Butler v Attorney-General (Victoria) [1961] HCA 32; (1961) 106 CLR 268. It is necessary to consider whether the provisions of the two statutes could “stand together” or “live together”, or were in “direct conflict”, or whether they were clearly and indisputably contradictory displaying such repugnancy that they could not be reconciled: Butler, Kitto J at 280, Taylor J at 285, Windeyer J at 290.
I do not consider the express words of the FW Act reveal a Parliamentary intention to somehow limit the operation of ss 52 and 82 of the ACL to the extent of any inconsistency or where there was relevant overlap. I consider it to be reasonably arguable that the fact that the relief available for a contravention of s 45 under ss 539 and 545 of the FW Act may in some circumstances overlap to an extent with relief available under ss 52 and 82 of the TPA does not result in a clear and indisputable contradiction between the provisions (and by analogy does not result in a contradiction between the FW Act and ss 18 and 236 of the ACL).
Third, in construing the proper interaction between the FW Act and the TPA (and with the ACL) it should be kept in mind that at the time of enactment of the FW Act the breadth of the protective and remedial function under ss 52 and 82 was well-recognised: see, for example, Marks v GIO Australia Holdings [1998] HCA 69; (1998) 196 CLR 494.
In Marks the High Court considered s 82 of the TPA, the then equivalent to s 236. Gummow J said the following (at [99]-[103]):
[99]The TP Act is a fundamental piece of remedial and protective legislation which gives effect to “matters of high public policy”. It is to be construed so as “to give the fullest relief which the fair meaning of its language will allow”.
[100]Section 82 applies across a spectrum of diverse legal norms created by Pts IV and V. A number of these will have no direct analogue in the general law. Given the objective of the legislation that is not surprising. However, it does emphasise the need for caution against treating a provision such as s 82 “as a mere supplement to or eking out of” pre-existing law. To the contrary, as Mason P put it, the court should not be “fearing to move far from the familiar coastline of traditional common law and equitable approaches”.
[101]In Janssen‑Cilag Pty Limited v Pfizer Pty Limited, Lockhart J said:
Section 82 is the vehicle for the recovery of loss or damage for multifarious forms of contravention of the provisions of Pts IV and V of the [TP] Act. It is important that rules laid down by the courts to govern entitlement to damages under s 82 are not unduly rigid, since the ambit of activities that may cause contravention of the diverse provisions of Pts IV and V is large and the circumstances in which damage therefrom may arise will vary considerably from case to case.
What emerges from an analysis of the cases (and there are many of them) is that they do not impose some general requirement that damage can be recovered only where the applicant himself relies upon the conduct of the respondent constituting the contravention of the relevant provision.
Also, a perusal of the provisions of Pts IV and V, the contravention of which gives rise to an entitlement to an applicant for compensation for loss or damage, points to the conclusion that applicants may claim compensation when the contravener's conduct caused other persons to act in a way that led to loss or damage to the applicant...
[102]These considerations, reflecting the apparent scope and purpose of the statute, militate against the presence of any legislative intention that before the court comes to assess the amount for which applicants are to be compensated under s 82 it first must identify any relevant general common law rules or analogies, understand the reasons that led to their development, and then seek to adapt or adopt them consistently with the scope and purpose of the legislation.
[103]As I have indicated earlier in these reasons, what was said by this Court in Gates (and Kizbeau Pty Ltd v W G & B Pty Ltd) does not determine that the measure of compensation which is recoverable in an action under s 82 is confined by analogies with tort or otherwise. The measure of damages recoverable in actions of a varied nature for which s 82 provides is not to be determined on the basis that the appropriate guide in most cases will be found by asking what would have been the measure if the common law did what it does not do, namely treat as a tort any facts which happen to give rise to an action under s 82. Analogy, like the rules of procedure, is a servant not a master.
(Citations omitted.)
Domino’s also said that if its alleged opinion that the Award did not apply lacked reasonable grounds (as the applicant alleges) it could not have been reasonable for the Franchise Operators to have concluded that the Award does not apply. That argument, however, did not grapple with the applicant’s point that Domino’s was in a different position to the Franchise Operators in terms of its understanding of the relevant industrial law framework and its role in providing information and advice to Franchise Operators and Prospective Franchise Operators regarding the applicable industrial instruments. It is significant to the applicant’s case that Domino’s provided documents to the Franchise Operators (as particularised at paragraph [30] of the FASOC) which included statements such as that Domino's has an “IR team to help set up systems correctly and maintain compliance” and that Domino’s provided the Domino’s Bookkeeping System to Franchise Operators, the functions of which included determining the terms and conditions to be afforded to in-store workers and delivery drivers and calculating the wages to be paid to in-store workers and delivery drivers.
I consider the causation pleadings satisfies the main purposes of a pleading. It gives notice to Domino’s of the case it has to meet, it avoids surprise to Domino’s, it defines the issues for trial, and along with further case management orders it will allow the trial to be conducted efficiently and fairly to both parties. I do not consider it appropriate to strike out these parts of the pleading.
THE REPRESENTATIONS PLEADING
Paragraphs [30]-[30A], [50]-[50A], and [51]-[51A]
Domino’s submits that the following paragraphs should be struck out:
(a)paragraphs [30] and [30A], being the Franchise Representations and the Franchise Opinion Representations respectively;
(b)paragraphs [50] and [50A] being the Dominoids Representations and the Dominoids Opinion Representations respectively; and
(c)paragraphs [51] and [51A] being the MC Pizza Representations and the MC Pizza Opinion Representations.
Having regard to the great similarity of the paragraphs it suffices to consider Domino’s contentions by reference to paragraphs [30] and [30A].
Paragraph [30], which sets out the Franchise Representations, alleges as follows:
From not later than April 2021, Domino’s represented by providing the Franchise Information and Compliance Information to Franchise Operators and to Prospective Franchise Operators, that:
(aa)the terms and conditions of all Domino’s employees were governed by two enterprise bargaining agreements, the first of which provided the conditions for Delivery Drivers, and the second of which provided the conditions for In-Store Workers;
(a)one or more of the Agreements (up to about 2012, as affected by the Agreed Base Rate Increases and, from 2012, as affected by the Deemed Base Rates) was binding upon all Franchise Operators with respect to the rates of pay required to be paid, and the terms and conditions of employment required to be afforded, to all Delivery Drivers and In-Store Workers employed by Franchise Operators to perform work in Franchise Stores;
(b)one or more of the Agreements (up to about 2012, as affected by the Agreed Base Rate Increases and from about 2012, as affected by the Deemed Base Rates) applied to each of the Franchise Operators with respect to the rates of pay required to be paid, and the terms and conditions of employment required to be afforded, to all Delivery Drivers and In-Store Workers employed by Franchise Operators to perform work in Franchise Stores;
(c)the Agreements (up to about 2012, as affected by the Agreed Base Rate Increases and from about 2012, as affected by the Deemed Base Rates) contained the rates of pay required to be paid, and the terms and conditions of employment required to be afforded, to all Delivery Drivers and In-Store Workers employed to perform work by Franchise Operators in Franchise Stores;
(d)the rates required to be paid, and the terms and conditions of employment required to be afforded to, all Delivery Drivers and In-Store Workers employed to perform work in Franchise Stores were the same as those required to be paid and afforded to Delivery Drivers and In-Store Workers employed to perform work in Corporate Stores; and/or
(e)it was lawful to pay Delivery Drivers and In-Store Workers employed to perform work in Franchise Stores, the rates of pay, and to afford them the terms and conditions of employment, set out in the Agreements (up to about 2012, as affected by the Agreed Base Rate Increases and from about 2012, as affected by the Deemed Base Rates),
(together and severally the Franchise Representations).
The paragraph is accompanied by detailed particulars. Particular 1 states that each of the Franchise Representations were partly written and partly to be implied. Particular 2 states that “insofar as each of the Franchise Representations were in writing they were contained in” the documents there particularised including by reference to the statements relied on in those documents. Particular 3 states that “insofar as the Franchise Representations were to be implied, they were to be implied from all the facts, matters and circumstances” there particularised.
Paragraph [30A], which sets out the Franchise Opinion Representations, is in similar form except that it alleges the representations are opinions held by Domino’s coupled with the representation that Domino’s held each opinion based on reasonable grounds. It alleges as follows:
Further and alternatively, by providing the Franchise Information and Compliance Information to Franchise Operators and to Prospective Franchise Operators, Domino’s represented that:
(a) Domino’s held the following opinions:
(i)the terms and conditions of all Domino’s employees were governed by two enterprise bargaining agreements, the first of which provided the conditions for Delivery Drivers, and the second of which provided the conditions for In-Store Workers;
(ii)one or more of the Agreements (up to about 2012, as affected by the Agreed Base Rate Increases and, from 2012, as affected by the Deemed Base Rates) was binding upon all Franchise Operators with respect to the rates of pay required to be paid, and the terms and conditions of employment required to be afforded, to all Delivery Drivers and In-Store Workers employed by Franchise Operators to perform work in Franchise Stores;
(iii)one or more of the Agreements (up to about 2012, as affected by the Agreed Base Rate Increases and from about 2012, as affected by the Deemed Base Rates) applied to each of the Franchise Operators with respect to the rates of pay required to be paid, and the terms and conditions of employment required to be afforded, to all Delivery Drivers and In-Store Workers employed by Franchise Operators to perform work in Franchise Stores;
(iv)the Agreements (up to about 2012, as affected by the Agreed Base Rate Increases and from about 2012, as affected by the Deemed Base Rates) contained the rates of pay required to be paid, and the terms and conditions of employment required to be afforded, to all Delivery Drivers and In-Store Workers employed to perform work by Franchise Operators in Franchise Stores;
(v)the rates required to be paid, and the terms and conditions of employment required to be afforded to, all Delivery Drivers and In-Store Workers employed to perform work in Franchise Stores were the same as those required to be paid and afforded to Delivery Drivers and In-Store Workers employed to perform work in Corporate Stores;
(vi)it was lawful to pay Delivery Drivers and In-Store Workers employed to perform work in Franchise Stores, the rates of pay, and to afford them the terms and conditions of employment, set out in the Agreements (up to about 2012, as affected by the Agreed Base Rate Increases and from about 2012, as affected by the Deemed Base Rates); and/or
(vii)it was not open to challenge in an Australian Court or industrial tribunal that the rates of pay and terms and conditions of employment set out in the Agreements were binding on Franchise Operators and that the Franchise Operators could lawfully pay those rates to Delivery Drivers and In-Store workers,
(the Franchise Opinion);
(b)Domino’s held the Franchise Opinion based on reasonable grounds, (together and severally the Franchise Opinion Representations).
(Emphasis in original.)
This paragraph is also accompanied by detailed particulars.
In relation to the applicant’s claim, paragraphs [30] and [30A] are effectively reiterated in relation to his employment by Dominoids at paragraphs [50]-[50A] (the Dominoid’s Representations and the Dominoid’s Opinion Representations) and in relation to his employment by MC Pizza at paragraphs [51]-[51A] (the MC Pizza Representations and the MC Pizza Opinion Representations).
The Dominoids Representations and MC Pizza Representations are stated to be part of the Franchise Representations, and those paragraphs thereby refer back to the representations of fact alleged in paragraph [30]. The Dominoids Opinion Representations at paragraph [50A] and the MC Pizza Opinion Representations at paragraph [51A] are stated to be part of the Franchise Opinion Representations, and those paragraphs thereby refer back to the representations of opinion alleged in paragraph [30A].
Domino’s submissions
Domino’s submitted that the pleading of the Franchise Representations in paragraph [30], fails to provide the necessary particulars of each of the representations alleged, which are also rolled up without any individual attribution to any of the six representations, and the particulars provided do not support the allegations. It argued that the particulars are embarrassing and should be struck out because, absent attribution of which particular(s) relate to which of the six representations it is not possible for Domino’s to form a view as to how and why it is alleged the particular representation was made or when and how it was conveyed. It said that it is denied basic procedural fairness as a result.
Domino’s also contended that the Franchise Representations, which are particularised as partly written and partly to be implied, conflate the written representations with the implied. It said, for example, that it is unclear, given paragraph 2 of the particulars to paragraph [30], if it is alleged that the representation at [30](aa) is written or implied. It argued, if it was written, which document[s] are relied on for that representation, and when was the relevant document[s] provided to, for example, Dominoids and MC Pizza. If it was implied, which writings and what other conduct or circumstances relied on to convey the meaning that is alleged beyond the text of the writing(s) for that representation.
As to the Franchise Representations, and its counterparts, Domino’s contended that each of the representations overlaps with the other to the extent that they are attended by uncertainty. It said that the differences between each of them, if there is a difference, is not apparent. Moreover, how each representation is put other than alternatively is not apparent.
Domino’s said the same about the allegations of representations of opinion at paragraph [30A] and its counterparts. This paragraph alleges that Domino’s represented that it held the alleged opinions on reasonable grounds, and Domino’s argued that the particulars to that paragraph do not support the allegation.
Consideration
Initially I saw some force in Domino’s submissions in this regard, but ultimately I was not persuaded that it is appropriate to strike out these parts of the pleading.
First, there is no force in Domino’s contention that paragraphs [30] and [30A] and their counterparts do not provide the necessary particulars of each of the representations alleged. The particulars provided are extensive and they set out a variety of documents, statements and acts, matters and circumstances in support of the allegation that the representations were conveyed.
Second, it must be kept in mind that, in substance, paragraphs [30] and [30A] and their counterparts allege that six identical or at least very similar representations were made by Domino’s. Each of the representations are said to be representations of fact (the Franchise Representations), or alternatively they are said to be representations of opinion held by Domino’s (the Franchise Opinion Representations).
Apart from subparagraph [30](aa) and its counterparts the similarity of the representations is plain. Subparagraphs [30](a)-(e), allege that Domino’s represented the following to Franchise Operators and Prospective Franchise Operators, as follows:
(a)that one or more Agreements was binding upon all Franchise Operators in terms of the rates of pay and terms and conditions of employment for all delivery drivers and in-store workers they employed;
(b)that one or more Agreements applied to all Franchise Operators in terms of the rates of pay and terms and conditions of employment for all delivery drivers and in-store workers they employed;
(c)the Agreements contained the rates of pay and terms and conditions of employment for all delivery drivers and in-store workers employed by Franchise Operators;
(d)the rates of pay and terms and conditions of employment for all delivery drivers and in-store workers employed by Franchise Operators were the same as those required to be paid and afforded to delivery drivers and in-store workers employed to work in Corporate Stores; and/or
(e)it was lawful for Franchise Operators to pay delivery drivers and in-store workers the rates of pay and conditions of employment set out in the Agreements.
Subparagraph (aa) is different because it alleges that Domino’s represented that the terms and conditions of all delivery drivers and in-store workers employed by Domino’s were “governed by” the Agreements.
In relation to the similarity of the representations alleged in subparagraphs [30](a)-(e) and in subparagraphs [30A](a)(ii)-(vii) (and their counterparts) Ms Doyle, senior counsel for the applicant, submitted that the applicant’s legal representatives had conscientiously attempted to reduce the number of representations alleged. She said that the applicant’s legal representatives gave “great and anxious consideration” to addressing the fact that the representations of fact alleged in subparagraphs [30](a)-(e) are, in substance, the same or very similar, as are the representations of opinion alleged in subparagraphs [30A](a)(ii)-(vii). Having gone through a careful process of reconsideration the applicant considered that each of the variations “governed by”, “binding”, “applied to”, “contained”, “required to be paid or afforded” and “lawful” were discernible as representations made either expressly, or to be implied from express words, having regard to the context.
On senior counsel’s submission, in part, the problem arose from slightly different language used in some documents and also because there was different language in the two principal iterations of the industrial legislation, which moved from “binding” to “applied”, and at another time from “applied” to “covered”. Ms Doyle said that the applicant’s legal representatives were concerned to avoid falling between two stools because of the requirement for some precision in relation to representations alleged, which might mean the applicant failed because he had not invoked the statutory language at a particular time and had instead invoked a synonym found in one of or more of Domino’s documents. She said that the applicant had taken a conservative approach to the pleading.
I accept the applicant’s submission in this regard, and Domino’s complaints about the pleading must be addressed in this context.
Ms Doyle also said that the applicant’s legal representatives had sought to address Domino’s complaint that it did not know which representations arose from which documents by particularising, almost in full, the terms of the documents in which the alleged Franchise Representations were expressly made, and from which the alleged Franchise Opinion Representations were in part to be implied.
I accept this submission too, and the complaints about the pleading should be seen in this light. For example, particulars 2(a) – (c) provide as follows:
Insofar as each of the Franchise Representations were in writing they were contained in:
(a)the Fair Work Laws – Australia Document, which stated, among other things, that:
(i)the “terms and conditions of Dominos Employees are governed by two Enterprise Bargaining Agreements (EBA). The 2001 agreement provides the conditions for Drivers, and the 2009 agreement for In-Stores and Managers” (slide 32);
(ii)“the wage rates for in-stores are provided by the 2009 EBA which was negotiated with the Union under the Fair Work Act. The rates were agreed and certified by Fair Work Australia” (slide 33); and
(iii)the wage rates for all Domino’s driver employees were defined into two specific transitioning groups, depending on whether there was an enterprise award or an industry award (slides 34-36);
(b)the Workplace Laws Training Manual, which stated, among other things, that:
(i)the “terms and conditions of Dominos Employees are governed by two Enterprise Bargaining Agreements (EBA). The 2001 agreement provides the conditions for Drivers, and the 2009 agreement for In-stores and Managers” (page 8);
(ii)“the wage rates for in-stores are provided by the 2009 EBA which was negotiated with the Union under the Fair Work Act. The rates were agreed and certified by Fair Work Australia” (page 8); and
(iii)“the wage rates for all Domino’s driver employees were defined into two specific transitioning groups, depending on whether there was an enterprise award or an industry award” (page 8);
(iv)“On 1 January 2014 wage rates will be no less than the Modern Award. The terms and conditions of the employees will continue to be dictated by the 2001/09 EBAs until a party decides to either terminate or renegotiate one of the agreements (as described above). Please note that after 2014, any renegotiations of the EBA’s will need to be compared to the Modern Fast Food Award with what is called the BOOT (Better Off Overall Test)” (page 9); and
(v)“Transfer of business – Generally speaking, if a transfer of business occurs between two national system employers (including those from referring states) the transfer of business rules and obligations under the Fair Work Act 2009 apply. Division 2B State awards and State employment agreements are transferable instruments (i.e. they can apply to the new employer) for the purpose of a transfer of business under the Fair Work Act 2009.” (page 6)
(c)the Fair Work Laws – Franchise Orientation Program Document which stated, among other things, that:
(i)the “terms and conditions of Dominos Employees are governed by two Enterprise Bargaining Agreements (EBA). The 2001 agreement provides the conditions for Drivers, and the 2009 agreement for Instores and Managers” (slide 32);
(ii)“the wage rates for in-stores are provided by the 2009 EBA which was negotiated with the Union under the Fair Work Act. The rates were agreed and certified by Fair Work Australia” (slide 33); and
(iii)the wage rates for all Domino’s driver employees were defined into two specific transitioning groups, depending on whether there was an enterprise award or an industry award (slides 34-36).
Having regard to the similarity in the representations of fact and opinion alleged I consider Domino’s submissions overstated the ambiguity of the pleading and exaggerated the difficulty it faced in understanding it. I can see little force in the contention that without attribution of which particulars relate to which of the six representations it is not possible for Domino’s to form a view as to how and why it is alleged each representation was made or when and how it was conveyed. The documents relied on are Domino’s documents and they must know when they were created and provided (if they were) to Franchise Operators and Prospective Franchise Operators. If Domino’s seriously maintain they cannot understand which particulars sit beneath which representation (when they are in substance the same or similar) it can address that by reviewing the documents, which are particularised, against the representations and the relevant legislation at the point in time the documents were provided to Franchise Operators and Prospective Franchise Operators. Alternatively, if this asserted difficulty cannot be more sensibly resolved between the parties I will direct the applicant to more fully explain, in correspondence, how the representations arise from slightly different language used in some documents and also because there was different language in the two principal iterations of the industrial legislation.
Nor, given that the representations are in substance the same, can I see any force in the contention that the pleadings are embarrassing and difficult to understand because the particulars conflate the written representations with the implied. The particulars expressly state that the written representations are set out in the documents that follow as particulars and that the implied representations are to be implied from all the facts, matters and circumstances that are set out. The thrust of the applicant’s case is clear and the pleading fulfils the purpose of putting Domino’s on notice of the case it has to meet. Further, in my view it is sufficiently clear that Domino’s understands the representations that it is alleged to have made and the basis upon which it is asserted that they were either made expressly or impliedly.
It is also plain from its Defence that Domino’s understands subparagraphs [30](aa) and [30A](a)(i) and their counterparts. At paragraph [30] of its Defence, undercover of an objection on the basis that the pleading was embarrassing, evasive and ambiguous with ‘rolled up’ and unsupportive particulars, Domino's admitted that:
…since about 2012 various documents have been provided to, and/or were made available to, Franchise Operators from time to time that included statements to the effect alleged in paragraph 30(aa).
Domino’s denied that the statements so admitted were representations of fact, but admitted that they were statements of opinion. In the cognate paragraphs [50] and [51], which concern representations alleged to have been made by Domino’s to Dominoids and MC Pizza respectively, Domino’s made the same or similar admissions.
In my view there is some merit in Domino’s contention that, if each of the representations alleged is essentially the same, then the applicant should be forced to “nail its colours to the mast” and decide which of the representations it proceeds with. But having regard to the difficulties to which senior counsel for the applicant pointed, I am not prepared to force the applicant to do so at this stage. I can see no real prejudice or unfairness to Domino’s in not doing so, at least at this stage. I will revisit the issue prior to trial if necessary.
Again, I am satisfied that the pleading of the representations satisfies the main purposes of a pleading by giving notice to Domino’s of the case it has to meet, avoiding surprise to Domino’s, defining the issues for trial and allowing the trial to be conducted efficiently. I do not accept that it is appropriate to strike them out.
OTHER PARAGRAPHS SOUGHT TO BE STRUCK OUT
Domino’s also sought orders to strike out other miscellaneous parts of the FASOC. I now turn to deal with those parts, while noting that they were not central in the application and little attention was given to them in the submissions. Some of these complaints in relation to the pleading were addressed through the FASOC, but Domino’s subsequent submissions did not make it clear whether or not its complaints are maintained. I have proceeded on the assumption that they are.
First, Domino’s submitted that paragraphs [28], [29] and [31] of the FASOC are, at best, allegations of representational conduct relied on in paragraphs [30]-[30A]. It also said that paragraphs [28] and [29] are impermissible because they plead evidence in contravention of r.16.02(1)(d) of the Rules.
Paragraph [28] alleges that Domino’s was obliged to provide Franchise Information, including in relation to revenue, profits and overheads of its Franchise Stores to Franchise Operators and Prospective Franchise Operators, and particularises the documents from which the alleged obligation is said to arise. Paragraph [28A] alleges that the Franchise Information which Domino’s was obliged to provide was in fact provided to Franchise Operators and Prospective Franchise Operators. Paragraph 29 alleges that Domino’s provided information and training to Franchise Operators and Prospective Franchise Operators, including in relation to employment laws and compliance with industrial obligations, and particularises the documents and things through which Domino's is alleged to have provided the relevant information.
I do not understand how it is said these paragraphs plead evidence, and I do not accept that it is appropriate to strike the paragraphs out on this basis. In my view they allege that Domino’s was obliged to and in fact did, on and from 30 April 2012, provide Franchise Operators and Prospective Franchise Operators with information and training regarding applicable employment laws and compliance with industrial obligations, and they particularise the basis for that allegation. Further, it is again clear that Domino’s understands the case it has to meet. In its Defence it admitted paragraph [28], [28A] and in response to paragraph [29] it admitted that it provided information and training to Franchise Operators in relation to employment laws and compliance with industrial obligations but denied that it provided similar information and training to Prospective Franchise Operators.
Paragraph [31] is additional to paragraphs [30]-[30A] in that it pleads that it should be inferred that the Franchise Representations and/or the Franchise Opinion representations were made by Domino’s when it provided the Franchise Information and Compliance Information to Franchise Operators and Prospective Franchise Operators.
Paragraph [31] does not appear to add much to but I would not strike it out on that basis. In my view the pleading is not one of representational conduct. It pleads a material fact; that the representations alleged in paragraphs [30] and [30A] were made. It is alleged that this fact should be inferred from other matters, including alleged facts ([31](a)], inferences or implications ([31](b) and (e)], the existence of legal obligations ([31(c), (d), (fa) - (fd)]), and public representations ([31](f). The pleading puts Domino’s on notice of the case which the applicant advances.
Second, Domino’s complained that the allegation in paragraph [52] that “no Agreement” covered Dominoids or MC Pizza delivery drivers who were Award Workers, is pleaded as a bald conclusion without pleading the material facts in support of the conclusion. It contended that paragraph and the counterpart paragraphs [38], [39] and [40] should be struck out.
I disagree. The paragraph has to be understood in context and having regard to the particulars. The basis upon which the applicant alleges that neither of the two relevant Agreements covered delivery drivers and in-store workers employed by Dominoids and MC Pizza in the relevant period is sufficiently clear, as is the basis upon which the applicant asserts that the Award rather than the Agreements applied to his employment. I consider paragraph [52] to be sufficiently clear to put Domino’s on notice of the case it has to meet.
Moreover, a pleading of a conclusion may also be a pleading of a material fact. In Sadie Ville at [20] and [57] Moshinsky J cited Kernel Holdings Pty Ltd v Rothmans of Pall Mall (Australia) Pty Ltd (3 September 1991, French J (as his Honour then was), unreported), where his Honour said:
I do not accept that the pleading of something which can be described as a conclusion cannot also be a pleading of a material fact. The real issue in a case where such an objection is raised is whether the facts are pleaded at too great a level of generality. In my opinion, the level of generality of the statement of claim in this case is too great for Rothmans to know with any precision what case it has to meet.
In McKellar at [20], Weinberg J approved the remarks of Drummond J in State of Queensland v Pioneer Concrete (Qld) Pty Ltd [1999] FCA 499; [1999] ATPR 41-691 at [21] where his Honour said “[t]he modern approach to litigation in this Court is not to strike out or order further particulars of a conclusionary pleading, if it appears that that is unnecessary in the circumstances of the particular case to achieve the object of pleadings.”
I consider it to be sufficiently clear that Domino’s understands the case it has to meet, and there is no requirement for further pleading or particularisation.
Third, Domino’s contended that the pleading at paragraph [54A] and [55A] (and its cognates at paragraphs [40A] and [44A] are embarrassing, a pleading of a legal conclusion and should be struck out. It said that it is alleged that Domino’s ought to have reasonably known that its opinion was wrong or ought to have reasonably requested or received advice to that effect, without any pleading or particularisation as to why that reasonably ought to have been the position. Thus Domino’s argued that the FASOC fails to plead the material facts alleged to have been known to and relied upon by Domino’s as the basis for the opinion alleged, and said that when viewed objectively the particulars do not afford a basis sufficient to ground that opinion as being reasonably held. On its argument, absent the pleading of such material facts at paragraphs [54A] and [55A], the applicant has impermissibly pleaded a legal conclusion drawn from unstated facts, which is not saved by the inclusion of particulars, even if they were adequate.
It is true that paragraphs [54A] and [55A] express the alleged lack of reasonable grounds as a conclusion, and the particulars are broadly uninformative. It cannot, however, reasonably be said that the FASOC does not disclose the basis for the allegation that delivery drivers and in-store workers employed by Franchise Operators during the relevant period were covered by the Award rather than by the relevant Agreements.
The FASOC must be read as a whole. Paragraph [50A] (in relation to Dominoids) and [51A] (in relation to MC Pizza) plead that, as part of the Franchise Opinion Representations, Domino’s made the Dominoids Opinion Representations and the MC Pizza Opinion Representations, including that Domino’s held those opinions based on reasonable grounds. Paragraph [54A] alleges that Domino’s did not have reasonable grounds for those opinions, and particularises that by stating that a reasonable company in the position of Domino’s ought to have known of the matters pleaded in paragraph [52] and/or received advice to the effect of the matters pleaded in that paragraph. Paragraph [55A] reiterates the same particulars.
Paragraph [54A] refers back to the matters pleaded in paragraph [52] which particularises the pathway by which the applicant alleges that during the relevant period neither of the relevant Agreements applied to delivery drivers and in-store workers employed by Dominoids and MC Pizza, including the applicant. The particulars to paragraph [52] in turn refer back to paragraphs [37]-[39] and [41]-[43] which appear under the heading “The True Position” and set out the basis upon which the applicant alleges that, during the relevant period, delivery drivers and in-store workers employed by Franchise Operators were, by operation of the applicable industrial legislation, in fact covered by the Award.
Thus the pleadings show that the basis for the allegation that Domino’s lacked reasonable grounds for the Franchise Opinion Representations (including the Dominoids and MC Pizza Opinion Representations) is that the “true position” under the applicable industrial legislation was that the Award and not the Agreements applied. The applicant’s case is that this was a matter observable by anyone who read the applicable legislation (see the particulars to paragraph [40A]), and thus the reasonable company in the position of Domino’s ought to have known and/or received advice in that regard. That might be criticised as a weak basis for asserting that Domino’s lacked reasonable grounds for its alleged opinion but it is reasonably arguable.
Again, it is apparent from Domino’s Defence that it understands the case it has to meet. In its Defence to paragraphs [40A], [44A] and [54A], undercover of various objections, and with reference to its pleading at [30A.4], Domino’s denied the alleged representations.
At paragraph [30A.4] of the Defence Domino's also alleged:
…since about 6 May 2009 and in respect of the period prior to 24 January 2018, the Fair Work Ombudsman resolved underpayment claims against, and conducted audits of, Franchise Operators who were not listed in the annexure to a WR Act Agreement or a FW Act Agreement on the basis of the employee entitlements of those Franchise Operators are governed by an Agreement and not an applicable award (including the Award), and not by reference to s 170MB of the WR Act or ss 313 and 314 of Part 2-8 of the FW Act.
That engaged with the allegations in [30A] and positively alleged that the regulator had previously resolved underpayment claims made against three Franchise Operators on the basis that the rates of pay and terms and conditions of employment in the relevant Agreements applied. The particulars to [30A] of the Defence state that “Domino’s also refers to and relies on the Summary of Legal Position agreed as between FWO and Domino’s about 7 December 2011 and FWO Domino’s Compliance Activity Report 2018.” Those contentions could only be advanced in order to show that Domino’s had reasonable grounds for the opinion alleged, and it shows that Domino’s understands the basis upon which it is alleged that it did not have reasonable grounds.
In circumstances where the substance of the allegation is clear and no embarrassment or prejudice will be caused by it, and Domino’s has notice of the case it has to meet and the issues for determination, there is no proper basis to strike out [54A] and [55A] and their cognates: Forty Two International Pty Ltd v Barnes [2010] FCA 397 at 110 (Yates J); Wheelahan at [25(o)], [25(d)].
Fourth, Domino’s submitted that paragraphs [32] to [34A] do not reconcile with paragraph [47], in which it is alleged that the Franchise Conduct and/or the Franchise Opinion Conduct was misleading and deceptive which is alleged and particularised by reference to the matters in paragraphs [40], [40A], [44] and [44A]. This submission was not developed beyond an assertion, except by reference to a letter by Domino’s solicitors dated 30 August 2019, to which I was not taken. In the circumstances I will not take this issue any further.
Fifth, Domino’s also submits that the pleading at paragraph [34](b) appears to cover the same ground as pleaded at [34](a). In summary:
(a)paragraph [34](a) alleges that the Franchise Conduct constituted an implied representation by Domino’s that the minimum rates of pay and minimum terms and conditions that could lawfully be paid and afforded were those contained in the Agreements; and
(b)paragraph [34](b) alleges that the Franchise Conduct conveyed to Franchise Operators that the minimum rates of pay and minimum terms and conditions that could lawfully be paid and afforded were those contained in the Agreements.
Domino’s submits that paragraph [34](b) should therefore be struck out. I am inclined to agree with Domino’s contention. Domino’s did not though mention this contention in oral submissions and I am not sure if it is pressed, the applicant did not address the submission, and these paragraphs are not central to the pleading. In the circumstances I will not direct that paragraph [34](b) be struck out. The applicant is directed to either explain to Domino’s legal representatives how the two subparagraphs cover different ground, and if not to delete either subparagraph (a) or (b). I will hear further submission from the parties on this if necessary.
Sixth, Domino’s submitted that the Franchise Opinion alleged at paragraph [30A](a)(vii) is a freestanding allegation of opinion without any further particulars to those provided in relation to the Franchise Representations. That subparagraph alleges that Domino’s held the opinion that:
…it was not open to challenge in an Australian Court or industrial tribunal that the rates of pay and terms and conditions of employment set out in the Agreements were binding on Franchise Operators and that the Franchise Operators could lawfully pay those rights to Delivery Drivers and In-Store workers.
I accept Domino’s contention that proper particulars are required for that allegation. The applicant is directed to provide particulars for that allegation and for the counterpart allegations of opinion at [50A](a)(vii) in relation to the Dominoid’s Opinion and [51A](a)(vii) in relation to the MC Pizza Opinion.
Domino’s further contended that particulars are required for the opinion alleged at paragraphs [50A](vi). It did not develop this submission and the applicant did not respond to it. I can see no basis to require further particulars of this allegation.
COSTS
Domino’s was unsuccessful and it is appropriate to order that it pay the applicant’s costs of the application.
I certify that the preceding two hundred and eight (208) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Murphy. Associate:
Dated: 13 April 2021
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